The News That Matters about the Nuclear Industry

Tepco to issue $612 million bond in first bond sale since Fukushima

Visitors look at the logo of Tokyo Electric Power Co (TEPCO) at the Energy Market Liberalisation Expo in Tokyo, Japan March 2, 2016

Tokyo Electric Power Co (Tepco) submitted plans on Wednesday to sell a total of 70 billion yen ($612 million) of bonds, its first sale since the 2011 Fukushima nuclear disaster.

Tepco unit, Tepco Power Grid Inc, which is in charge of power transmission and distribution, said in a filing with the Kanto Local Finance Bureau it will sell a 30 billion yen three-year bond and a 40 billion yen five-year bond. The coupon will be set between March 3 and 17.

The sale will mark the return of the company to Japan’s corporate bond market, which it dominated before the 2011 earthquake and tsunami triggered the world’s worst nuclear crisis since Chernobyl in 1986, bringing Tepco to its knees.

The utility, once Asia’s largest, was essentially nationalized after Fukushima. It currently faces billions of dollars in costs to dismantle the crippled Fukushima-Daiichi nuclear power plant, decontaminate the area and compensate victims after the meltdown of three reactors.

Tepco, which has 650 billion yen worth of bonds maturing in the year ending March 2018, wants to restart regular bond issuance to ensure stable refinancing. It said the planned issue was to pay for “equipment, pay back debt and bond redemption.”

Investors, who were initially skeptical about the bond issuance plan, have become more comfortable with the utility’s outlook after the government last year provided more details on decommissioning and compensation costs.

The government owns 50.1 percent of the company following its bailout, seen by some investors as an implicit state guarantee for the company.